Chinese bidding big at home auctions

Rich Chinese are removing their money and assets from their own country and outbidding Aucklanders on houses, a worried real estate agent says.

Ian Thornhill of Barfoot & Thompson said one wealthy Chinese buyer paid top dollar for a Market Rd, Epsom, house which had since stood empty for weeks as the deal was "just offloading some surplus funds".

Thornhill said that type of activity was not unusual and he fears for the effects.

"I don't think it's a good thing at all. Kiwis are getting really upset. They can't compete with Asians who have the money and they pay more. You can see Kiwis only have a certain amount of money to spend but they do stretch themselves. This is all having an impact on us. It's as plain as the nose on your face, what's happening in the auction rooms each week."

But Graham Wall, who this year has sold seven out of 11 $3 million-plus properties to foreigners, said people should be "colourblind" on race and welcome overseas buyers.

"We love selling to anyone. We just love the money and we just love doing the deal," Wall said. "I've sold to Americans, Russians and Chinese this year and they're delightful.

"We welcome people who want to spend their money."

Thornhill said some of the Asian buyers were residents but others were domiciled in China and were buying houses not intending to live here.

The Overseas Investment Office says foreigners only need approval under certain conditions, such as when a deal is worth more than $100 million, when more than 5ha of land is involved or if the land is deemed sensitive, such as farmland or adjoining a reserve or on the edge of a lake.

Thornhill said he wondered about the effects of this activity on the next generation of Aucklanders.

"We've got three young boys and they're going to be struggling. Unless mum and dad help them out, they'll never do it."

Bernard Hickey of interest.co.nz last week told the Food & Grocery Council's conference in Melbourne of the Epsom deal.

Speaking about the economy and the effects of high-priced house sales, he said the Chinese national flew here, asked to see the house valued at more than $1 million at 10pm then subsequently bid at auction.

"But first he checked the room for cameras to make sure no one knew he was buying it," Hickey told about 300 people at the Crown conference centre. "Then he paid more than $2 million for the house which has now been empty ever since."

Powerful politicians and businesspeople were taking their money and assets out of China and putting them in havens like New Zealand which was one of the few countries allowing foreigners to buy houses in an unregulated manner, Hickey said.

"There are no restrictions on non-resident purchasers in New Zealand," he said, adding that Hong Kong did not allow such activity.

Hickey said he was selling his Epsom house to move to Wellington where houses were cheaper when he learned about the $2 million-plus deal when he spoke to Thornhill.

Wall has employed a "well connected" multilingual Chinese man, whose family owns substantial Auckland properties, and he expects that to result in him selling more Auckland houses to Chinese.

Wall praised NZ Trade & Enterprise for allowing him to use its Shanghai office when he visited this year and for putting him in touch with people.

Steve Koerber of Barfoot said Asians were active and had driven up Auckland prices.

"If they weren't there, prices would not be as high as what they are."

Marcus Beveridge of Queen City Law said people were being racist complaining about Chinese buyers.

"We have one of the most active conveyancing law offices in New Zealand, to be honest. And it is possible that our Government will open up top end business immigration in the New Year which would really get things going," he said.

The Business Herald reported last month how Chinese investors were making their presence felt in all aspects of New Zealand real estate: development, investment, trades, services, infrastructure, funding and the residential market.

One of the biggest new investors is Furu Ding, the multimillionaire Shanghai businessman of the wealthy New Development Group. He paid $53 million for a long-vacant site in Auckland's CBD and is planning to build a five-star hotel tower.